The Labor Market Impacts of Technological Change: From Unbridled Enthusiasm to Qualified Optimism to Vast Uncertainty

Abstract

This review considers the evolution of economic thinking on the relationship between digital technology and inequality across four decades, encompassing four related but intellectually distinct paradigms, which I refer to as the education race, the task polarization model, the automation-reinstatement race, and the era of Artificial Intelligence uncertainty. The nuance of economic understanding has improved across these epochs. Yet, traditional economic optimism about the beneficent effects of technology for productivity and welfare has eroded as understanding has advanced. Given this intellectual trajectory, it would be natural to forecast an even darker horizon ahead. I refrain from doing so because forecasting the "consequences" of technological change treats the future as a fate to be divined rather than an expedition to be undertaken. I conclude by discussing opportunities and challenges that we collectively face in shaping this future.

The Impact of Foundational AI on International Trade, Services and Supply Chains in Asia

“…AI could also augment jobs and create demand for new jobs. According to Autor (2022), 65% of workers are used in occupations that did not exist in 1940, underscoring the potential for technology and AI specifically to create new jobs. Relatedly, AI is likely to accelerate the ongoing pace of churn in skills needed, and some jobs will become redundant while jobs requiring new skills will emerge.…”

Future Shocks: Automation Meets the Pandemic

“…The automation of screen-facing work and occupations has and will continue to generate both high-paying work for the “coding elite” (Burrell and Fourcade, 2021) as well as low-paid screen-facing “micro-work” around the world (Gray and Suri, 2019; Tubaro and Casilli, 2022; Tubaro et al, 2020; Shestakofsky, 2017). Interestingly, the domain which automation has left relatively untouched is the domain of person-facing work, particularly interpersonal service jobs such as health care, food service, hospitality, and the like, where job functions unfold in a “human environment” demanding physical dexterity, interpersonal skills, and constant improvisation (Autor, 2022; Smith, 2020).…”

“…However, at the same time, digitally enabled automation has changed production and labor markets in discernable ways, even if it has not yet led to mass job displacement. Automation has amplified the long-term trend toward the polarization of jobs into the higher wage and lower wage ends of the occupational spectrum (Acemoğlu and Restrepo, 2019;Autor, 2022). So long as it generates economic gains which accrue to small portions of the population in economically developed countries (Acemoğlu, 2021), uncontrolled digitally enabled automation will deepen economic inequalities.…”

The link between computer use and job satisfaction: The mediating role of job tasks and task discretion

“…With the digital transformation of work, this question has recently regained importance, partly because the skill requirements of jobs are strongly associated with job quality and ultimately with workers’ job satisfaction (Gallie, 2007) as well as with labour market inequalities (e.g. in terms of earnings) (Autor, 2022; Kristal & Edler, 2019).…”

“…With the digital transformation of work, this question has recently regained importance, partly because the skill requirements of jobs are strongly associated with job quality and ultimately with workers' job satisfaction (Gallie, 2007) as well as with labour market inequalities (e.g. in terms of earnings) (Autor, 2022;Kristal & Edler, 2019). Despite its relevance, answers to the question of the upskilling or de-skilling nature of technology-and the related consequences of technology for job quality-remain controversial.…”